ALTERNATIVE INVESTMENTS
PART 2
The best way to diversify your portfolio
How to get started in alternative investing
Nichola Loock
Diversification is a buzzword thrown about by many financial planners and fund managers . But how does diversification of your portfolio really benefit you and why are alternate investments the perfect vehicles to achieve this ?
Diversification is a management strategy that blends different investments into a single portfolio . The motivation behind this is that a variety of investment will yield a higher return . It also suggests that investors will face lower risk by investing in different vehicles .
“ Never invest in a business you cannot understand .”
Whether this is your first-time creating diversification in your portfolio , or you are wanting to add something different to your strategy , alternatives are a great way to protect and build your wealth . “ Contrary to what some commentators predict , we feel that investors may start gravitating towards the relative safety of fixed assets . The Coronavirus has illustrated that the economy and related market investments are arguably fragile in times of crisis . Real estate offers a tangibility that investors will be drawn to ,” says Nick Morgan , Co-founder of Opportunity Private Capital .
Alternative investing is an investment strategy that ’ s been used by the 1 % for a long time . This category of investing was typically only open to those meeting minimum net worth requirements and with high investment minimums . However , with changes in regulations and technology enabling easier access to opportunities , many different types of alternative investments are opening up to the everyday investor .
Types of Alternative Investments Alternative investments include venture capital , private equity , hedge funds , real estate investment trusts , commodities as well as real assets such as precious metals , rare coins , wine , and art . Here are the most popular types of alternative investments :
16 FEBRUARY 2021 SA Real Estate Investor Magazine